- (1.) THIS petition under Article 226 of the Constitution challenges the validity of certain proceedings-started against the petitioners under the Patiala Recovery of State Dues Act (No. IV of 2002 Bk. ). The proceedings are for the recovery of a large sum of money mentioned as Rs. 4,98,589/1/6 due from the petitioners to the Patiala State Bank. Similar proceedings for the recovery of a much smaller sum of money said to be Rs. 25,691/- have also been separately started against the petitioners, and" another similar writ petition (Civil Writ 389 of 1958) has been filed to challenge those proceedings. The grounds in support of both the petitions are identical and it is convenient to deal with them together.
(2.) THE petitioners are a joint Hindu family firm styled Messrs. Tilakram Rambaksh of lehragaga. They admittedly had dealings with the Patiala State Bank and there was a transaction of a loan between the parties on 23-5-1953 out of which the present claim has arisen.
(3.) THE Patiala Recovery of State Dues Act defines "state dues" as any amount due to the rajpramukh of the State or the State, or any department of the State from any person and includes debts due to the Patiala State Bank. Section 4 of the Act authorises the head of department to determine in the prescribed manner the exact amount of State dues recoverable by his department from a defaulter. The Managing Director of the Patiala State Bank is the head of department under Clause (6) of Section 3 of the Act, section 5 of the Act lays down the modes of recovery after the exact amount has been determined by the head of department and, among other modes of recovery, it authorises the head of department to move the Nazim who is equivalent to a Deputy Commissioner or a collector to recover the amount as arrears of land revenue. Section 12 of the Act authorises the government of the State to make rules for the purpose of carrying out the provisions of the Act and in particular to prescribe the manner in which the amount of State dues is to be determined by the head of department. The Act thus sets up a machinery both for the determination of the amount due from a particular person and the recovery of that amount once it is determined and, of course, the determination is to be made in accordance with the rules made under Section 12. Such rules have been framed and the respondents claim that the dues sought to be recovered in the present cases were determined in accordance with those rules. Rule 3 of the rules describes the mode of determination of dues and says: "3. (i) The head of department to which State dues are due shall cause a notice to be served on the defaulter in the manner hereinafter prescribed. (ii) The notice shall be signed by the head of the department and shall specify the amount of the state dues and the date on which such dues had fallen due and shall require the defaulter to pay such dues on or before a date specified therein or to appear on such date before the head of the department who issued the notice or before such other officer as may be specified therein (hereunder referred to as the Inquiry Officer) and present a written statement of his defence: provided that the date shall be so fixed as to allow at least 15 days to the defaulter to make payment or to appear and answer the claim. (iii) Where there are more defaulters than one, notice shall be issued to each such defaulter. (iv) The written statement referred to in Sub-rule (2) shall not be chargeable with any stamp duty. " Rule 5 says that, if the defaulter does not appear, the head of department, if satisfied that the notice was duly served, may proceed ex parte and determine by order in writing the amount of state dues recoverable from him. Rule 0 then provides that, if the defaulter appears and presents his written statement, the head of the department shall examine the objections of the defaulter in the light of the relevant records of the department, and shall then by order in writing determine on the same day or any subsequent day the exact amount of State dues recoverable from him. Rule 7 then says: "7. (i) The head of the department shall again serve a notice on the defaulter requiring him to pay the State dues determined under the preceding rule within fifteen days of the date of the service of the notice and informing him that in default of payment on such date, he shall proceed to recover the same through the Nazim or the Accountant General or both. (ii) Where the defaulter fails to pay the State dues on the said date, the head of the department may proceed to recover them through the Nazim or the Accountant General or both. " Rule 8 provides for an appeal against an order passed under Rule 5 or 6 to the Minister or Secretary in charge, if the order is passed by the head of department who is subject to the control of a minister or Secretary, and that in the case of the Patiala State Bank such an appeal shall be preferred to the Board of Directors of the Bank. ;